Yet mutual funds have a dark side. José Azar, an economist now at Charles Rivers Associates, argued in his ingenious dissertation that mutual funds can reduce market competition and raise prices for consumers. The idea behind this argument dates to the late 19th century, another period of rapidly growing inequality. Back then, economists argued that firms can reduce competition in markets by buying up the firms that operate within them. At the time, the firms that bought up other firms were called “trusts” to conceal their monopolistic goals. They were broken up by progressive reformers after Congress passed the first major antitrust law, the Sherman Antitrust Act of 1890. Azar’s insight—drawing on some other recent work by economists—was that modern institutional investors such as mutual funds are trusts in sheep’s clothing.

http://www.slate.com/articles/news_and_politics/view_from_chicago/2015/04/mutual_funds_make_air_travel_more_expensive_institutional_investors_reduce.single.html